New Jersey operators face potential tax hike and college prop bet ban

Bills S3064 and S3080 could bring major changes for online sports betting and igaming operators in New Jersey, with taxation and college sports at the center of the tabled legislation, respectively.

Senator John McKeon’s bill, S3064, proposes doubling the tax rate on sports betting and online casino to 30%. 

Currently, taxation in the Garden State is set at 13% for sports betting, while igaming operators pay 15% in tax with an additional 2.5% charged to the Casino Redevelopment Authority.

S3064, which was introduced before the legislature on April 8, would increase the tax rate to 30% of gross gaming revenue (GGR), which would be paid into the state’s Casino Revenue Fund. 

Taxation in New Jersey is on the lower end of the scale when compared to neighboring states such as New York and Pennsylvania. 

In New York, online sports betting GGR is currently taxed at a rate of 51%, while in the Coal State, operators pay 36%.

If the bill passes, it will take effect on January 1 following the date of enactment. 

The other major bill hitting the New Jersey legislature is bill S3080, sponsored by Senator Kristin Corrado, which would look to prohibit college prop bets amid fears around student-athlete safety and sporting integrity. 

In the legislative session on April 7, Senator Corrado said: “Proposition bets have led to a rise in the harassment of student-athletes and have threatened the integrity of college sports. 

“I have heard about many individuals who have been the victim of online harassment because they didn’t perform to the expectation of a bettor who made a side wager.

“This legislation will ban player-specific prop betting in New Jersey, which will help curb that appalling behavior, and make college athletic events safer for all participants.”

Currently, prop bets are allowed in New Jersey, however, players aren’t allowed to wager on games involving in-state colleges. 

This new bill comes less than a week after Louisiana became the latest state to prohibit prop bets on college athletes after the state’s Gaming Control Board sanctioned a ban on the markets.

The ban in the Bayou State will take effect on August 1, with the regulator confirming operators can honor outstanding bets until this date. 

Louisiana joins Maryland, Ohio, and Vermont in prohibiting prop bets on college sports in recent months. 

The National Collegiate Athletics Association (NCAA) has called for collegiate prop bets to be banned nationwide, citing the protection of players and sporting integrity. 

NCAA president Charlie Baker appealed to states to ban the market, noting concerns about the wellbeing of students.

Representatives in Michigan are also looking into the issues surrounding collegiate prop bets, while a North Carolina State Lottery Commission spokesperson said that they would consider banning the market at the NCAA’s request.